Behind the Dominance of Chinese Heavy Equipment in Indonesia
In the last 10 years, the heavy equipment market in Indonesia has experienced a major shift.
In the past, names like Caterpillar, Komatsu, and Hitachi dominated, but now their positions are starting to be replaced by Chinese brands such as SANY, XCMG, Zoomlion, SDLG, Liugong, Shantui, Lovol, Lonking, XGMA, and Yutong.
Increasingly better quality, more efficient pricing, and direct financing support from manufacturers make Chinese heavy equipment the primary choice for the mining, construction, logistics, and infrastructure sectors.
But behind this success lies a serious and recurring problem faced by many distributors, leasing companies, and users of Chinese heavy equipment in Indonesia — namely insurance claims that are rejected, partially paid, or have no clear outcome.
Why did it happen?
Are insurance companies in Indonesia unfair?
Or is there something wrong with the way Chinese companies place their insurance protection?
Facts on the Ground: Many Claims of Problematic Chinese Heavy Equipment
Based on L&G Insurance Broker’s practical experience in handling thousands of heavy equipment policies in Indonesia, it was found that more than 60% of claims cases for Chinese-made heavy equipment were problematic due to errors from the start in the insurance closing process.
Examples of cases that often occur:
- SANY excavator completely damaged in coal mine, claim rejected due to so-called “operational error”.
- XCMG bulldozer sank in mining area, claim rejected because policy does not cover flood risk.
- Zoomlion crane collapsed during installation, claim paid in half due to “improper operation”.
- SDLG loader caught fire on site, but was rejected due to inappropriate policy type.
These cases show that the problem is not with the insurance product, but with how the policy is structured and who handles it.
- The Understanding Gap Between Chinese Manufacturers and the Indonesian Insurance System
Chinese heavy equipment companies are accustomed to their country’s insurance system being more centralized and protective of manufacturers.
However, the system in Indonesia is very different — it is decentralized, negotiation-based, and highly technical.
Many Chinese manufacturers or distributors do not understand that:
- Policies in Indonesia do not automatically cover all operational risks.
- Policy wording is very important in determining claim decisions.
- Reinsurance plays an important role in approving large claims.
This lack of knowledge makes them vulnerable to signing weak policies, full of legal loopholes, and easily rejected when a large claim occurs.
- Common Mistake: Relying on Private Agents or Direct Placement
Many Chinese heavy equipment distributors in Indonesia consider insurance to be merely an “administrative formality” — simply fulfilling the requirements of a leasing or sales contract.
As a result, they often take care of matters directly with the insurance company or through personal acquaintances.
The problem:
- Personal agents have no negotiating power at the insurance or reinsurance company level.
- They often do not understand the technical risks of heavy equipment such as mine exposure, high workloads, or extreme environments.
- When large claims arise, these agents lack the technical or legal capacity to fight for payment of the claims.
While insurance companies require documents, technical reports, and contractual arguments to approve claims, agents are unable to provide such support.
- Mistakes in Choosing the Type of Policy
This is the most common classic mistake.
Many Chinese heavy equipment are insured using policies that do not match their risk characteristics.
For example:
- Using Fire & Allied Perils when it should be Contractor’s Plant & Machinery (CPM).
- Do not add Operational Risk Extension for tools working on active project sites.
- Does not include a Third Party Liability (TPL) clause which is important for tools operating in public areas.
As a result, when a loss occurs, such as equipment being overturned, falling into a river, catching fire, or colliding with another facility — the claim is rejected because it is “not covered by the policy.”
- Police Language and Wording That Are Not Translated Correctly
Many Chinese principals do not examine the policy contents in depth due to language barriers.
In fact, every word in the policy wording has legal consequences.
For example, the difference in terms between:
- “Accidental damage” (damage due to accidents) and
- “Mechanical or electrical breakdown” (mechanical/electrical breakdown)
A claim may be rejected simply because one of those terms is not listed.
Professional brokers such as L&G Insurance Broker play a role in creating correct and fair wording for both parties, ensuring there is no room for unfounded claim rejections.
- No Coordination with Reinsurance
Large claims (usually over Rp. 1 billion) can rarely be paid by local insurance companies alone.
They need to obtain approval and funding support from reinsurance, both domestic and foreign.
The problem is, many Chinese heavy equipment insurance placements are done without involving brokers with access to international reinsurance networks.
When large claims arise, local insurers often lack sufficient financial capacity or reinsurance support — resulting in claims being delayed or even rejected.
L&G Insurance Broker has direct connections to global reinsurance, ensuring every large heavy equipment policy has strong financial backing and international legality.
- Weaknesses in Claims Documentation and Reporting
Many claims fail not because the policy is faulty, but because of errors in reporting procedures.
- Example:
- Claim report is more than 7 days late.
- The equipment was repaired before the surveyor arrived.
- Supporting documents (invoices, operator reports, photos of the incident) are incomplete.
Professional brokers play a vital role in ensuring that the entire claims process is executed in a timely, complete, and compliant manner with insurance and reinsurance company standards.
- Lack of Bargaining Power During Claim Negotiations
In the Indonesian insurance system, the large claims process always involves negotiation.
When there are differences of interpretation between the client and the insurer, the final decision often depends on the technical ability and reputation of the party representing the client.
If a client is represented only by a personal agent or administrative staff, the claim will likely end with minimal results.
But ifclientAccompanied by brokers such as L&G Insurance Broker, the negotiation process is carried out by insurance experts, engineers, and lawyers who understand contracts technically and legally.
That’s why L&G has managed to win many large claims that were initially rejected.
- Case Study: When Brokers Make a Big Difference
One of the major distributors of Zoomlion heavy equipment in Indonesia has experienced a major incident:
A crane worth more than Rp 8 billion collapsed during an industrial pipe installation in Kalimantan.
The initial claim was denied due to “operator error” and “not covered under the policy.”
After the Broker intervenes:
- The policy was reviewed, and a clause was found indicating that accidental damage was still covered.
- The broker prepares additional technical reports and submits formal arguments to the foreign reinsurer.
- As a result, the claim was approved and the client was paid in full Rp. 8 billion.
Without a broker, the losses would be borne by the distributor alone.
- Huge Business Impact
Failure in insurance claims is not just a momentary loss.
For Chinese heavy equipment companies in Indonesia, the impact could shake the entire business.
Financial Impact:
- The loss of heavy equipment assets worth billions of rupiah.
- The company’s cash flow is disrupted.
- Bad debts are increasing because buyers are unable to pay.
Reputation Impact:
- Customers lose trust in the brand.
- The manufacturer’s reputation was damaged due to being deemed irresponsible.
- Distributors lose out on major tender opportunities because they are deemed not “insured properly.”
These problems are often not visible at first, but the effects are long-term and very serious.
- Complete Solution with L&G Insurance Broker
For more than two decades, L&G Insurance Broker has been a trusted partner of Chinese heavy equipment companies in Indonesia.
We understand the ins and outs of the industry — from credit sales, to operational risks in the field, to large claim settlement strategies.
Here is the total solution that L&G offers:
✅ Risk Review & Policy Design
We review all risks and design policy wording that truly protects heavy equipment — including while it is in service, being transported, or being rented out.
✅ Premium and Clause Negotiation
L&G has a reputation and extensive network in the industry, enabling us to obtain the best premiums with protective clauses.
✅ 24-Hour Claim Assistance
Our claims team is ready to assist from the beginning of the incident until the claim is paid out — including negotiations with loss adjusters and reinsurers.
✅ Connection to International Reinsurance
All high-value heavy equipment policies will receive reinsurance support from the global market to ensure large claims can be paid without any hassle.
✅ Transparent Digital System
Through the LIGASYS platform, clients can monitor policy and claim status in real-time, transparently, and documented.
Conclusion: It’s Time for Chinese Distributors and Manufacturers to Act Smart
Failed insurance claims are not caused by bad luck — but by placing the insurance incorrectly in the first place.
Chinese heavy equipment companies such as SANY, XCMG, Zoomlion, SDLG, Liugong, Shantui, Lovol, Lonking, XGMA, and Yutong should learn from experience:
“Insurance is not just a formality, but an important part of business strategy and asset protection.”
Use a professional insurance broker like L&G Insurance Broker — not a private agent, not a direct placement.
With experience insuring thousands of Chinese heavy equipment in Indonesia and successfully resolving dozens of large claims, L&G is the real solution to securing your business.
HOTLINE L&G 24 JAM: 0811-8507-773 (TELEPON – WHATSAPP – SMS)
Website: lngrisk.co.id
Email: halo@lngrisk.co.id
